Sales growth year-on-year: 3.9%
Type of operation: Foodservice
The UK’s biggest foodservice provider, Brakes Group, is being touted around town by its US-based private equity owners Clayton, Dubilier & Rice with a price tag of £1.2bn.
With a turnover of £1.6bn and profit of £50.6m, it should prove to be an attractive target for potential private equity investors. But for the current management it remains business as usual, insists Brakes’ chief executive Frank McKay.
Since CD&R bought Brakes in 2003, the spectre of the company being re-sold has always been there. The secret of success is ignoring the speculation and getting on with the job in hand, says the man who took over from Bruno Deschamps in 2005. And he is clearly more than happy with progress.
“Brakes is in excellent health. We are fully committed to the execution of our growth strategy and developing our strong relationships with our customers and suppliers,” he says.
Not bad going for someone who built his reputation at builders merchant Travis Perkins and admits the foodservice business was a big change.Then again, as he points out, there are some similarities between the two industries in that they both have to deal with thousands of different customers from small independents to national chains.
The key to any good business is being able to deliver what customers want and being flexible enough to deliver to a wide range of customers with different needs. Brakes delivers to about 20,000 customers throughout the UK every day.
Since joining the company, McKay’s focus has been on delivering a better service for existing customers as well as attracting new business.
This remains the priority, despite the ongoing uncertainty regarding the ownership of the company, he insists, adding that customer service has been improved dramatically in the past 12 months following a restructuring of the business.
Last May, Brakes broke up certain parts of its business to put a greater focus on regionality. It set up four autonomous regional companies, each with its own chief executive, with the aim of forging closer links with customers. The areas covered are Scotland and the north, south west, south east and central. By being closer to the final customer, McKay says Brakes gained a greater understanding of local and individual needs.
“By making these changes we have been able to improve our fresh and local ranges,” he says. “We are a big company with complex logistics and IT systems, but by working closely with our customers we can use this to our advantage.”
The switch has also boosted availability and sales are heading in the right direction. The business was able to increase bonuses paid out to staff in the last year by 20% as a result, boasts McKay. He also believes that the company could do a better job of telling people exactly what it does.
“Far too many people still think of Brakes as Brakes frozen food,” admits McKay. “Now we offer so much more in terms of fresh and chilled as well as frozen. About 60% of what we deliver is now chilled or fresh,” he adds.
The company is currently rebranding its entire delivery fleet to spread the word about what it supplies. It will depict images of its products and meals on the sides of its 1,600- strong fleet. The images will also be shown on the lorries of Brakes’ subsidiary operations - Pauleys Fresh Produce, M&J Seafood and Prime Meats.
Brakes is not resting on its laurels, however. Foodservice is a growing industry as more people dine out of home, but equally it is becoming more -competitive.
Last year, the dominance of Brakes and 3663 First for Foodservice was challenged when Woodward Foodservice bought DBC to create a third national wholesaler. And almost every other wholesaler in the country is looking to increase its catering trade.
As well as getting its message across, Brakes is still looking for new business. Last month it won a contract to supply the John Lewis Partnership’s customer and staff restaurants.
Despite the speculation surrounding its future ownership, Brakes continues to embrace a ‘let’s just get on with it’ attitude. The keenest interest is expected to come from private equity players rather than trade buyers.
Given McKay’s impressive track record since 2005, it’d be a brave man that would bet on a major management shakeup - regardless of who’s holding the purse strings.